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Lockdown at worst will lead to a passing 2-3-month blip, says Marcellus’ Saurabh Mukherjea

The impact of the fresh lockdown and restrictions announced by the Maharashtra government will be noticeable for the entertainment industry, restaurants and airlines, while the IT sector is unlikely to be hit, said Saurabh Mukherjea, founder of Marcellus Investment Managers, on Monday.

The impact of the fresh lockdown and restrictions announced by the Maharashtra government will be noticeable for the entertainment industry, restaurants and airlines, while the IT sector is unlikely to be hit, said Saurabh Mukherjea, founder of Marcellus Investment Managers, on Monday. Mukherjea, however, said the lockdown at worst will lead to a passing 2-3-month blip rather than a structural hit.
The Maharashtra government on Sunday announced a weekend lockdown and night curfew during weekdays from Monday to April 30, in addition to a slew of other restrictions like the closure of private offices, theatres and salons to curb the unprecedented surge in COVID-19 cases. The weekend lockdown will start from 8 pm on Fridays and last till 7 am on Mondays.
“It’s not a good thing to have to go through a lockdown all over again in one of India’s most important industrial states (Maharashtra), but from a market sentiment perspective, the market will look through this. This looks like a 2-3 month blip for a critical industrial state but it is not one of those game changers for the market as a whole," said Mukherjea in an interview with CNBC-TV18.
According to him, the global recovery bodes well for the large Indian IT services companies like TCS and Infosys. "So, I do not think the Maharashtra lockdown is going to impact the sector.”
“There will be massive damage in the Indian metals and mining counters. There might be a bit of a movement because near-term demand is impacted but Indian metals and mining stocks are largely a play on the underlying commodity price as oppose to domestic economic cycle and hence I am not expecting massive damage there. There damage will be pronounced for entertainment, restaurants, airlines, cinema halls, etc., and that again should be a 2-3-4 month hit to their earnings rather than a structural hit,” said Mukherjea.
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